Gov. Jerry Brown has proposed to eliminate redevelopment in California as a way to save $1.7 billion from the state budget (about 2 percent of his overall solution). Yes, let's all applaud the "boldness" of the gesture. But this one is going to backfire terribly: It will give a short-term boost to the ailing budget, but reduce the long-term economic growth that would otherwise come to California.

The Legislature authorized redevelopment agencies in 1945. In its early incarnation, redevelopment, both in California cities and around the country, was used, sometimes in careless ways, to tear down poor, often minority neighborhoods to facilitate new development. Those who suffered from the impacts of "urban renewal" are still with us, so any proposal to end redevelopment is sure to find sympathy from urban progressives who remember the neighborhood battles of the 1950s and 1960s.

But urban renewal was stopped in its tracks, not just in San Francisco, but virtually everywhere, by the mid-1970s. Redevelopment agencies today are quite different. More than three-quarters of cities in California have redevelopment agencies, and more than half were established after 1978, when Proposition 13 passed.

Used wisely, redevelopment helps start private investment dollars flowing back into neglected urban areas. This translates into jobs. Why would a state with a 12.8 percent jobless rate throw away a tool that delivers jobs?

When local government designates a redevelopment area, it is committing to channel a portion of the future growth of property tax revenue back into that area. On those promised revenue flows, the agency can issue bonds to pay for infrastructure, economic development, and, crucially, affordable housing. (The vast majority of affordable housing funding in California comes from redevelopment funds.)

This allows local government to finance public improvements that will attract market investment and ultimately leverage more economic growth than what would have been possible without the improvements. We never would have been able to turn a polluted former rail yard into the new Mission Bay biotech hub without the ability to issue bonds to put in streets, sewers, water service and storm drains. We will never be able to convert the polluted Hunters Point Shipyard to a new use without the tools of redevelopment. There are similar examples up and down the state.

This is what is so troubling about the governor's proposal: It tosses away a tool for growing the economy.

It's true that the redevelopment revenues are not going to schools and other public services. But places like the Hunters Point Shipyard and Treasure Island already are not generating taxes. Redevelopment is the way we convert them to new uses and, eventually, bring them back onto the tax rolls.

Certainly there are examples, both local and around the state, of bad redevelopment investments. If reformers in Sacramento can invent some way to distinguish in advance which redevelopment investments are likely to be most effective, then we should welcome the change. But they are going to find out what everyone engaged with practical economic development already knows: It's hard to do, and it's hard to know in advance what will work.

The governor's proposal asserts that development in the redevelopment areas is shifted from elsewhere in the state. This is partially true; but it's worth pointing out that we are talking about eliminating the tool central cities use to attract growth that would otherwise go to the suburban periphery. The elimination of redevelopment funding - coupled with the governor's proposal to eliminate the Williamson Act farmland preservation funding - amounts to a shift in favor of suburban sprawl.

This collides with SB375 - the state law that compels local planning agencies to design developments to reduce vehicle miles traveled - and AB32 - the state law to address climate change.

The illusion of free money created by taking funds from redevelopment agencies and giving it to cities and counties must sound irresistible to cash-strapped local governments. But it is an illusion. The governor's budget has a line about creating a new way to pay for infrastructure by making it easier to pass local bonds. If this proposal is real, and can be designed in a way to be effective, then we will have come up with a new way to pay for "redevelopment" under another name. It still will have the same fiscal trade-off that state-funded redevelopment has: putting tax dollars into infrastructure means those dollars are not available to pay for public services.

My own view, based on years of working on planning issues in the Bay Area, is that it is extremely unlikely that voters will vote for bond measures to pay for infrastructure and affordable housing or to redevelop former military bases or polluted rail yards.

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If the magic of the governor's proposal is a de facto de-funding of infrastructure in favor of a short-term boost to public services, then we are looking at something that will be bad for the state's economy (and budget) in the long run.